The prime ministers of Canada and India have agreed to launch negotiations towards a new Comprehensive Economic Partnership Agreement (CEPA), according to a senior government official.
Today, Prime Minister Mark Carney and Indian President Narendra Modi met on the sidelines of the G20 summit.
The two countries – who are in the midst of a reset of a strained relationship – are now beginning talks about boosting co-operation, the official said, and a readout is expected.
This development comes just hours after Carney made it clear, in response to a question from CTV News, that “yes,” he does consider India to be a reliable trading partner.
Carney went on to add that, not dissimilar from other nations, issues can arise, but there are mechanisms and systems in place to adjudicate.
“We can be both a reliable trading partner, and there will be some sources of friction. What I will say, with respect to India is that we don’t have a Comprehensive Economic Partnership Agreement with India, one of the world’s largest and fastest growing economies,” Carney said. “The ability to have more effective trade with them, to scale that trade with them, would be greatly helped by that.”
After years of tension, Carney has sought to reset relations with India amid U.S. trade uncertainty. Sunday’s sit-down between the two leaders was their second one-on-one in the last six months.
Modi and Carney last had a bilateral at the G7 summit in Kanansaskis, Alta. in June. Both leaders also met on the sidelines of the G20 summit in South Africa on Saturday, along with Australian Prime Minister Anthony Albanese to announce a new trilateral partnership in technology and innovation.
Strained relations
This reset comes more than two years after former prime minister Justin Trudeau stood up in the House of Commons and said there were “credible allegations” that agents of the Indian government were involved in the assassination of Canadian Sikh leader Hardeep Singh Nijjar in 2023.
A year later, the RCMP and the federal government accused Indian diplomats and consular officials based in Canada of engaging in clandestine activities linked to serious criminal activity in this country, including homicides and extortions. In response to those allegations, Canada expelled six diplomats, while India kicked out six Canadian diplomats in retaliation and denied the accusations.
After relations soured, Canada paused negotiations for a broad trade pact in 2023. On Sunday, the prime minister said Canada already has a “strong commercial relationship with India,” but that his government is now looking to put that on “sound footing” through a potential new trade pact. “Which give protections for businesses, protections to Indian businesses, a clear set of rules, dispute mechanisms and others, and build on those opportunities.”
Asked about CSIS recently saying the threat from India remains, prime minister said: “With respect to any forms of foreign interference, we have to remain vigilant. We are vigilant.”
Partnership ‘requires dialog’: Sidhu
Carney’s affirmation of how the federal government views relations with India at this juncture comes after International Trade Minister Maninder Sidhu would not say whether he thought India is a reliable partner, in an interview with CTV Question Period airing Sunday.
“With dialog, if you’re sitting at the table, you can work through many different challenges, but also scope out opportunities,” Sidhu said, emphasising how Canada is looking to increase trade with the Indo-Pacific country.
When asked repeatedly by host Vassy Kapelos on whether India is a reliable trading partner despite previous allegations, Sidhu would not answer directly.
“We’re stepping up to protect Canadians,” Sidhu said. “But at the same time, my job as a trade minister is on the economic side, to scope out economic opportunities and grow trade with nations around the world.”
Pressed again on if Canada believes India is a reliable partner, Sidhu said the relationship “requires dialog.”
“We’re having conversations at the highest of levels, in different tracks,” Sidhu said. “We do have a law enforcement collaboration track going on the same time to make sure that we’re talking about public safety, to make sure that communities are safe in both countries. And that’s very important to have.”
Sidhu, who just returned from a three-day visit to India last week that focused on sectors, including critical minerals, clean energy and agriculture, later added that the federal government is “letting our businesses lead.”
Asked by Kapelos if restarting trade negotiations for a formalized agreement is coming soon, Sidhu said the Carney government is looking at “starting afresh.”
“What I’d say to that is, new government, new prime minister, new mandate,” Sidhu said. “And so, restarting (an) existing trade agreement would be off the table. It would be starting afresh to look at new opportunities and scope it out.”
Canada could be reliable, India says
While Sidhu would not explicitly call India reliable, new Indian High Commissioner to Canada Dinesh Patnaik told CTV Question Period last month that Canada is “not yet” a reliable energy supplier.
“A country of that size is going to consume everything, not just energy, food, you name it, anything in the world, we are going to be the largest consumer in the world,” Patnaik said at the time, pointing to India’s large population and growing economy.
“So, we look for suppliers where they can be a reliable supplier,” he added. “Not a supplier who today says, ‘Okay, I’m going to supply you,’ and tomorrow says, ‘No, I have this problem with you, I cannot supply you.’”
But despite past disagreements, Patnaik also said India wants Canada to be a reliable partner and believes it could be.
Canada and India agreed to allow diplomats to return to each other’s countries in October, following Foreign Affairs Minister Anita Anand’s visit to India.
India is Canada’s seventh-largest trading partner, with two-way trade totalling $30.9 billion in 2024. India is also Canada’s largest source country for immigrants, with nearly 393,000 Indian students in 2024 and more than 1.8 million Canadians of Indian origin.
With files from CTV News’ Spencer Van Dyk